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The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Buy-and-Hold Goon to Rob: “Whose Version of “Honesty” Should Be Allowed and Who Decides What They Think Is Honest?

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Whose version of “honesty” should be allowed and who decides what they think is honest?

Each community member gets to decide for himself or herself which case is more persuasive. Anyone who engages in abusive posting to limit the ability of community members to hear both sides is responsible for any losses those community members suffer as a result.

Rob

Comments

  2. Sure.

    I have zero problem with someone saying that he thinks Buy-and-Hold is a good strategy or that he follows it himself or that he recommends that others follow it. Millions of good and smart people are Buy-and-Holders. Those people have made very important contributions over the years. I have zero problem with being friends with Buy-and-Holders. I like them. I have learned from them.

    If someone were to say that he personally believes that the safe withdrawal rate is always 4 percent, I would be fine with that. Anyone can have whatever personal opinion he wants to have. It gets more dicey if someone says that there is research supporting the claim that the safe withdrawal rate is always 4 percent. If someone said that, I would feel oligated to point out that Shiller’s nobel-prize-winning research showed that valuations affect long-term returns. If someone said that he doesn’t care about Shiller’s research, he still believe that the safe withdrawal rate is always 4 percent, I would permit that person to say that but I would say that I do not agree. I would leave it up to the readers of the site to decide for themselves what withdrawal rate to use in their retirement plans. I don’t see it as my place to tell people what to do with their retirement money. I do see it as noth my right and my obligstion to express my own views accurately and honestly.

    Does that help at all?

    Rob

  3. Okay. I want to have a weekly guest column on your website that will feature the far reaching implications of my honest thoughts of buy and hold.

  4. No.

    I’m not going to give you a weekly guest column. Lots and lots and lots of people have been writing about the benefits of Buy-and-Hold for many years now. It would be hard to say something new on that subject. If you did have something new to say, I would want to do what I could to get the message out to people. But I doubt that you could come up with something new to say on that subject on a weekly basis.

    Rob

  5. “ But I doubt that you could come up with something new to say on that subject on a weekly basis.”

    Since you haven’t had anything new to say in the last 20 years you don’t need to post anything on anyone else’s board either.

  6. I do. Anonymous. And everyone else who believes that Shiller’s Nobel-prize-winning research is legitimate research needs to as well.

    The difference is that everyone has heard the Buy-and-Hold message that timing doesn’t work thousands upon thousands upon thousands of times. They have absorbed that message into their conciousness, For most people, the claim that “you didn’t consider valuations” doesn’t compute. Somewhere in their brain that claim is translated into a claim that “market timing works” (if valuations matter, market timing must work), and dismissed on gtounds that “everybody knows that market timing doesnt work.” We need to make the “everybody knows” part of that response disappear.

    Everybody does not know any such thing. There is 42 years of peer-reviewed research showing that market timing always works and 10 percent of the population believes that that research is legitimate research. We need to normalize discussions of stock investing by having everyone get to know that there is nothing even a tiny bit weird or odd or taboo about a belief that market timing works, that there is a lot of research showing that and that there are a lot of perfectly smart and good people who believe that.

    We want people to be able to make a conscious and aware choice of one of the two academic-based models for understanding how stock investing works. People know about Buy-and-Hold. They have thought it through, they have talked it through. People do not know about Valuation-Informed Indexing. They have not talked it through or thought it through. So today it remains suspect in the eyes of most investors. To change that, we need to open every discussion board and blog to honest posting re the past 42 years of peer-reviewed research. That’s why I beat that drum so frequently.

    We have in our possession the research that permits us all to invest successfully for the long term. But that research has not been doing us much good. We have seen higher CAPE values in recent decades than we ever saw at any earlier time in U.S. history. Not good. The problem is that people are not hearing daily warnings about the dangers of high CAPE values. So high CAPE values do not scare them.

    The situatiion could be compared to the situatiion with smoking prior to the days when the research showing that it causes lung cancer was publicized. There was a time when the tobacco industry suppressed discussion of that research. As a nation of people we “knew” that smoking caused cancer. But we might as well have not known. Today we know. Fewer people smoke. Some people still smoke. Today they do so knowing the risks. I think that’s the way we should handle it in the investing realm. Pemit people to learn about the risks of Buy-and-Hold by opening every site to honest posting re the research. Then let the chips fall where they will. If people still want to follow Buy-and-Hold strategies, that’s their business. But permit honest posting re both academic schools.

    Rob

  7. You haven’t pointed anything new, so if you are going to block anything related to buy and hold if YOU think is not new, then the same standard needs to apply to marketing timing and VII.

  8. Are you saying that Greaney was aware that his retirement study lacked a valuation adjustment before I even put up my famous post of May 13, 2002? The reaction to that post (on both sides) showed that that was something that community members there had not taken into consideration.

    Rob

  9. You’re commenting on something from 21 years ago, which confirms that you don’t have anything new. As such, we should just follow the guidance you gave by blocking posts that are just repeats.